Jaguar Land Rover is to expand into Saudi Arabia by using an aluminium pressing plant and, eventually, a production line to make an all-new Land Rover model there.

The British car maker has signed a letter of intent with the National Industrial Clusters Development Program in Saudi Arabia to buy aluminium from what is being described as one of the world’s largest aluminium smelters.

It is then expected to produce body panels for future models, and other components, at an all-new, state-of-the-art pressing plant that is being built in the kingdom.

Ralf Speth, CEO of Jaguar Land Rover, says now that the company is on a “solid footing”, it has to expand globally. He says he is confident that this move is the right one for the firm, allowing it to secure the “cheapest aluminium in the world”.

A memorandum of understanding is expected to be signed in the middle of 2013, before the production begins in early 2015.

There’s no news on which new model will be built in Saudi, but JLR sources have hinted that it could be based on the new Range Rover platform.

The new model (which sources insist was never intended to be made in the UK) will initially be sent to the Saudi line as a ‘knocked down’ kit to allow the operation to gain experience, before full production switches to the country.

The main driver behind this radical move, says Speth, is to secure a steady, cost-effective supply of aluminium as global demand for the material starts to rise. Global fuel economy regulations are expected to make the use of lightweight materials increasingly important for the car industry.

Fourth-generation Mazda 3 strikes back at Focus and Golf with an upmarket...

Saudi Arabia is well positioned for this project because it has both vast bauxite deposits — the rock that is the main source of aluminium — and the cheap power ideal for the energy-intensive process that’s needed to create aluminium.

Speth says JLR is committed to a “lightweight future” and its demand for aluminium will rise considerably, with at least four Land Rover company models made from the materials. Most future Jaguars are also expected to be made of aluminium.

The real business case for JLR in Saudi is in access to cheap Aluminium produced using the plentiful cheap electricity available from gas fired power stations. Saudi does not impose ever higher energy costs like in the UK to appease the "man made climate change" brigade.

Aluminium is expensive only due to the huge amount of electricity needed to produce it. In Angelsey North Wales the smelter closed, apart from a scrap recycling facility, due to its cheap energy deal ending with the adjacent Nuclear power station approaching closure due to age.

"Saving the Planet" whether you believe in man made climate change or not certainly has and is destroying manufactiuring jobs in the UK meanwhile the Germans are busy building ever more coal fired power stations.

Land Rovers sell well in the oil-rotten-rich Middle East. Besides Saudi Arabia has miles and miles of sand dunes and cheap fuels so why not build these expensive monsters where a huge number of them are going to be sold. Besides I doubt Saudis worry about emissions or environment that much or perhaps at all.

Nice call, Range Rover. Many engineers would also be happy to relocate there for the oil-rich kingdom's zero-tax regime. And once there Range Rover can hike prices further and make its vehicles to the Saudi taste, i.e., huge petrols and gold plated aluminium shells and diamond crested interiors, may be.

There is a lot of aluminium smelting going on in the Middle East primarily due to really cheap energy costs . We pay about £14 a month for all our utilites here in Bahrain .

The big problem in Saudi is there is no local workforce whatsoever or manufacturing industry and the locals wont be working at any JLR plant . All the workforce will be very cheap Asians who will do well to get £300 a month . The Saudis will want to be executives and managers though !

To give an example Gulf Air the Bahrain national airline needs one Vice President it has 24 !!! They get paid upwards of £20 000 a month. Not sure if JLR will be able to avoid that sort of nonsense

A high risk strategy but it could come off and there are no environmental concerns whatsoever out here . Some folks will get a lot of baksheesh out of this deal .

The headaches may start down the line when the Saudis will want to Saudiise the operation . They are such poor workers many companies pay them to stay at home so they cant f things up . Essentially they are ghost employees and the ex pats do all the work .

There is a lot of aluminium smelting going on in the Middle East primarily due to really cheap energy costs . We pay about £14 a month for all our utilites here in Bahrain .

The big problem in Saudi is there is no local workforce whatsoever or manufacturing industry and the locals wont be working at any JLR plant . All the workforce will be very cheap Asians who will do well to get £300 a month . The Saudis will want to be executives and managers though !

To give an example Gulf Air the Bahrain national airline needs one Vice President it has 24 !!! They get paid upwards of £20 000 a month. Not sure if JLR will be able to avoid that sort of nonsense

A high risk strategy but it could come off and there are no environmental concerns whatsoever out here . Some folks will get a lot of baksheesh out of this deal .

The headaches may start down the line when the Saudis will want to Saudiise the operation . They are such poor workers many companies pay them to stay at home so they cant f things up . Essentially they are ghost employees and the ex pats do all the work .

Will be interesting to see what happens .

+1 Old Toad. I've been to Saudi Arabia twice, and can't remember any local person working there. And even if they do have a job, they don't show up on time or do anything, since the success of a project depends only on the will of Allah, and not the effort people put into...

This business case makes sense only if the electricity costs will outweigh the difference in salary in case of building a factory in Bangladesh. Because that's where the workforce comes from...

I have a friend who works at Jeddah airport and his tales of the Saudi 'workforce' are exactly the same as yours. I dread to think what the quality will be from this plant (never a LR strong point), unless it only remains a body panel plant, to take advantage of the cheap power.

What happens when a new set of sheikhs take over from the house of Fahd......and their new sharia brand finds the word "landrover" to be blasphemous?....The aluminium will not sound that cheap then, I imagine.

It makes sense to me. I'm not sure about the environmental implications, but the Saudis will be going ahead with this plant whoever buys the aluminium so it might as well be Tata as their Land-Rover and Jaguar products already use a lot of the metal and the arab market is clearly a prime target for their products. Also it appears that this will be an aditional model aimed primarily at this market. I imagine a cross between a Range-Rover and a BMW Phantom. Something aimed at people with unlimited money and no taste whatsoever.

Wow. 24 VP's? Is that even possible? Count me in! In all jokes aside, it really is true, my cousin works at one of the more popular smelting plants in SA (won't name it). But yeah, almost 80% are asian workers. http://chordsworld.com/ed-sheeran-the-a-team-chords/